In past coverage, we've suggested that Megaupload CEO Kim Dotcom and his …

Is Megaupload doomed? Last month, we talked to three legal scholars who suggested that the shuttered file locker was probably in trouble. While the University of Virginia's Chris Sprigman thought Megaupload's principals had a fighting chance of being acquitted, James Grimmelmann of New York Law School argued that the government had a strong case—perhaps even a "slam dunk."

But Jennifer Granick, a Bay Area attorney blogging for Stanford's Center for Internet and Society, has risen to Megaupload's defense, calling the site "a lot less guilty than you think."

Granick focuses on an issue that didn't come up much in our earlier discussion: the distinction between civil and criminal law. Traditionally, copyright enforcement has largely been a civil matter—that is, it focused on private disputes between copyright holders and infringers. But in recent years, Congress has increasingly made copyright infringement a criminal matter, getting the federal government directly involved in prosecuting alleged infringers.

For example, the lawsuits against Napster and Grokster a decade ago were both civil cases in which major copyright holders sought damages and injunctions against the file-sharing services. The individuals who ran those companies didn't face jail time even though they lost their cases. In contrast, Megaupload is being criminally prosecuted by the federal government. If he loses the case, CEO Kim Dotcom (read our profile) is likely to spend years in jail.

That matters because some of the government's key arguments against Megaupload are based on judge-made doctrines that have emerged from civil cases. Concepts like "secondary liability" (e.g. a company like Napster knowingly facilitating infringement by users) and "inducement" (e.g. Grokster "inducing" its users to commit infringement) were created through America's common-law legal process, in which earlier decisions serve as precedents for later ones. And the courts have shown great reluctance to throw a defendant in jail for actions that have not been explicitly declared illegal by Congress.

Direct vs. indirect

Megaupload's executives face two kinds of charges. First, they are accused of direct copyright infringement—the unauthorized duplication of copyrighted works by the defendants themselves. Second, they are accused of secondary infringement—aiding and abetting infringement by Megaupload users.

"I agree with the copyright law experts interviewed by Ars Technica that the most damning allegations in the indictment are the claims of direct infringement, particularly for the prerelease movies," Granick said in her blog post. But she argued that the government's case was much weaker on the secondary infringement charges.

Jennifer Granick

Granick says the government's "aiding and abetting" charges are "something like the civil liability inducement theory the US Supreme Court created in the 2005 Grokster case." But, she said, it's far from clear that a civil offense like inducement can actually give rise to criminal liability.

"This has never been decided by any court," she wrote, but the pending Rojadirecta case raises just this issue. The government's seizure of rojadirecta.com was a criminal matter, but the charges against Rojadirecta focus on links to infringing content, which would be secondary—and therefore civil—infringement.

She makes a similar point about the conspiracy charges facing Megaupload. Conspiracy is a criminal offense, but the government is effectively charging Megaupload's executives with conspiring to commit civil copyright infringement. Yet the conspiracy statute "makes clear that the object of the conspiracy must be an offense or fraud against the United States, in other words, a federal crime," Granick writes. A conspiracy to induce others to commit copyright infringement doesn't qualify.

"Prosecuting this case against Mega, especially if Defendants get good criminal lawyers who also understand copyright law, is going to be an uphill battle for the government," she concluded.

"The defendants look really guilty"

Is she right? We asked Derek Bambauer, a noted legal scholar at Brooklyn Law School, for a second opinion.

Derek Bambauer

Bambauer largely agreed with Granick on the merits; subjecting Megaupload to criminal penalties for committing offenses under judge-made civil law would be a troubling step. But Bambauer wasn't convinced that Granick's arguments will save Kim Dotcom.

For starters, under the 1997 No Electronic Theft (NET) Act, direct infringements alone (for example, casual file-swapping by individual Megaupload employees) could get the defendants five to ten years in prison. He noted that in principle, ordinary users sharing infringing works on BitTorrent face similar penalties; the federal government just doesn't invoke these penalties very often. But when the government wants to, as in this case, it can seek multi-year jail sentences for even casual file-swapping.

That means that the Megaupload principals could wind up serving long jail sentences even if Megaupload is found completely blameless for the infringing activities of its users.

Unsurprisingly, then, Bambauer predicts the defendants will accept a plea bargain agreement rather than take the case to trial.

As for the inducement charges, Bambauer suggests one way the government could argue for applying criminal penalties: while Congress hasn't explicitly endorsed judge-made theories of secondary liability, it has jacked up the criminal penalties associated with copyright infringement since the courts began formulating secondary liability theories. The courts might rule that when Congress made more kinds of infringement subject to criminal penalties in 1997, they were implicitly including secondary infringements among the offenses eligible for those penalties.

Bambauer notes that Kim Dotcom and his associates are not sympathetic defendants. "In theory, they should be interpreting this carefully, but the defendants look really guilty," he said. "They look like they are running a criminal enterprise. There are all sorts of emails showing them trying to skirt the law." So, he predicted, the courts might well be strongly motivated to find a legal theory that allows them to put Kim Dotcom and company in jail.

Timothy B. Lee
Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times. Emailtimothy.lee@arstechnica.com//Twitter@binarybits

Is what Megaupload did legal? The courts will decide.Is everything that Megaupload did ethical? I don't think so.

Sure there are parts of Megaupload that lots of people like, but it more than likely than not was financed by their "less than legal" embracement of piracy. What this basically boils down to is if 99% of people used a file-sharing service for free because the remaining 1% bankrolled it off the backs of illegal actions, should that business continue? In the real world, that answer is clearly no, but the Internet involves many jurisdictions and definitions of the world "illegal".

So, he predicted, the courts might well be strongly motivated to find a legal theory that allows them to put Kim Dotcom and company in jail.

This sums up the state of our court system.....

The other side of that coin is finding a legal theory to lessen a mandatory sentence some how, as trying to write laws that account for everything will always fail. That's also why their is a system of appeals if you feel you have been sentenced incorrectly.

Even before the DMCA, courts were skeptical of arguments where plaintiffs attempted to paint defendants as direct infringers, on the basis that it's their servers that were being used in an infringement. They generally held that there needs to be some aspect of voluntary action – so, for instance, the copy shop would not be liable for direct infringement even though its photocopiers might be used to break the law.

It didn't have to be this way – courts could have found, for instance, that when it's your servers being used for infringement, that means you're directly liable, not merely secondarily liable.

But the cases I know are in the civil context. I'd be curious if there's a similar doctrine in criminal copyright infringement. If not, there's nothing stopping the government from arguing that simply operating servers opens you up for direct liability when your users use them to break the law.

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

The courts might rule that when Congress made more kinds of infringement subject to criminal penalties in 1997, they were implicitly including secondary infringements among the offenses eligible for those penalties.

Oh, so we're including what Congress might have been thinking when passing a law as part of the bill now? Good to know. If I ever get arrested, I'll be sure to hire a lawyer and a psychic.

"The law" and "implicit" never belong in the same sentence together, unless you're saying something like, "The idea of implicit crimes in the law is really stupid".

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

There are not swear words sufficient enough to damn this hypocrisy.

Why are you wasting time here posting that and not out doing heart transplants on African babies then?

You know, the other day I preordered Pier Solar -- it's a fangame released as a Sega Genesis cartridge. It's got an optional music CD with an improved version of the sountrack for customers who have the SegaCD add-on. The CD comes in a $25 soundtrack bundle, but is available as a free download if you want to burn it yourself.

Except all 3 mirrors are now defunct; the first one is a MegaUpload link, and the second goes to a Pirate Bay listing that no longer exists. The only option to download the thing is directly from the website, which costs them bandwidth.

There ARE people using sites like MU and TPB for legit purposes. That's not to say they're not willful infringers, but it would sure be nice if the law-abiding users didn't get taken down with them.

As someone living in a civi law system country I found this pretty interesting. Judge made law just doesn't exist here, Judges are here to interpret the law. The precedent they set is binding for lower courts but not the extent as in a common law system.

Now in our constitution the "nulla poena sine legs" (no penalty without a law) principle exists. This means people can't be prosecuted for thing that weren't forbidden by law at the time they committed the offense. At least in germany this also means that in civil disputes judges can interpret the intent of the law makers but they can't do that in criminal cases, they have to follow the letter of the law. Also analogies aren't possible. This also means criminal laws have to be precise, i.e. something like "or similar offenses" wouldn't be valid.

Aren't there any similar provisions in the US? How about other common law countries? Can judges really declares something a crime and than judge on that? Doesn't sound like a very appealing process to me.

Aren't there any similar provisions in the US? How about other common law countries? Can judges really declares something a crime and than judge on that? Doesn't sound like a very appealing process to me.

The U.S. has shifted to more of a Kafkaesque system, with the government converting civil cases to criminal, issuing retroactive immunity for corporations that broke the law, and using secret laws that even the accused aren't allowed to read.

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

There are not swear words sufficient enough to damn this hypocrisy.

Exactly.

US Citizens to government: "What's with all these regressive taxes and use of military against groups who are not actually any threat to us?"

Response: "Never mind that. What's important is that you're not spending enough money on entertainment, you selfish bastards."

You know, the other day I preordered Pier Solar -- it's a fangame released as a Sega Genesis cartridge. It's got an optional music CD with an improved version of the sountrack for customers who have the SegaCD add-on. The CD comes in a $25 soundtrack bundle, but is available as a free download if you want to burn it yourself.

Except all 3 mirrors are now defunct; the first one is a MegaUpload link, and the second goes to a Pirate Bay listing that no longer exists. The only option to download the thing is directly from the website, which costs them bandwidth.

There ARE people using sites like MU and TPB for legit purposes. That's not to say they're not willful infringers, but it would sure be nice if the law-abiding users didn't get taken down with them.

There's nothing stopping anyone from hosting a new mirror of these files on a different torrent server. I don't see a major problem here, just that these guys happened to mirror their non-pirated files on servers that tended to be used for piracy. Why they chose to do that is anyone's guess, but it's easy to solve the problem. If the bandwidth costs were actually hurting them, I'm sure they already would have found a new mirror host.

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

There are not swear words sufficient enough to damn this hypocrisy.

Why are you wasting time here posting that and not out doing heart transplants on African babies then?

Dumbass.

Sorry, I actually cared about people for a minute there. Won't happen again.

You know, the other day I preordered Pier Solar -- it's a fangame released as a Sega Genesis cartridge. It's got an optional music CD with an improved version of the sountrack for customers who have the SegaCD add-on. The CD comes in a $25 soundtrack bundle, but is available as a free download if you want to burn it yourself.

Except all 3 mirrors are now defunct; the first one is a MegaUpload link, and the second goes to a Pirate Bay listing that no longer exists. The only option to download the thing is directly from the website, which costs them bandwidth.

There ARE people using sites like MU and TPB for legit purposes. That's not to say they're not willful infringers, but it would sure be nice if the law-abiding users didn't get taken down with them.

There's nothing stopping anyone from hosting a new mirror of these files on a different torrent server. I don't see a major problem here, just that these guys happened to mirror their non-pirated files on servers that tended to be used for piracy. Why they chose to do that is anyone's guess, but it's easy to solve the problem. If the bandwidth costs were actually hurting them, I'm sure they already would have found a new mirror host.

Or went out of business because of copy right oppression halts innovation and progress.

There's nothing stopping anyone from hosting a new mirror of these files on a different torrent server. I don't see a major problem here, just that these guys happened to mirror their non-pirated files on servers that tended to be used for piracy. Why they chose to do that is anyone's guess, but it's easy to solve the problem. If the bandwidth costs were actually hurting them, I'm sure they already would have found a new mirror host.

Because technology is neutral. TPB is the best place to put up a torrent, and MU is in many instances the best filehost for large files. MU's affiliate program also means that they might have gotten some extra cash, which could help a bit with their server costs.

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

There are not swear words sufficient enough to damn this hypocrisy.

++ On this comment!

rombuu wrote:

Why are you wasting time here posting that and not out doing heart transplants on African babies then? Dumbass.

Why don't you stop trolling and instead contribute something useful to this conversation?

The courts might rule that when Congress made more kinds of infringement subject to criminal penalties in 1997, they were implicitly including secondary infringements among the offenses eligible for those penalties.

Oh, so we're including what Congress might have been thinking when passing a law as part of the bill now? Good to know. If I ever get arrested, I'll be sure to hire a lawyer and a psychic.

"The law" and "implicit" never belong in the same sentence together, unless you're saying something like, "The idea of implicit crimes in the law is really stupid".

I agree. Criminal laws have to be specific. Throwing someone in jail for an act only implied to be illegal sounds like incarcerating them for not committing a crime.

You know, the other day I preordered Pier Solar -- it's a fangame released as a Sega Genesis cartridge. It's got an optional music CD with an improved version of the sountrack for customers who have the SegaCD add-on. The CD comes in a $25 soundtrack bundle, but is available as a free download if you want to burn it yourself.

Except all 3 mirrors are now defunct; the first one is a MegaUpload link, and the second goes to a Pirate Bay listing that no longer exists. The only option to download the thing is directly from the website, which costs them bandwidth.

There ARE people using sites like MU and TPB for legit purposes. That's not to say they're not willful infringers, but it would sure be nice if the law-abiding users didn't get taken down with them.

There's nothing stopping anyone from hosting a new mirror of these files on a different torrent server. I don't see a major problem here, just that these guys happened to mirror their non-pirated files on servers that tended to be used for piracy. Why they chose to do that is anyone's guess, but it's easy to solve the problem. If the bandwidth costs were actually hurting them, I'm sure they already would have found a new mirror host.

Not disputing your argument, but I think finding a torrent server or mirror that does not tend to be used for piracy might be really hard.

There's nothing stopping anyone from hosting a new mirror of these files on a different torrent server. I don't see a major problem here, just that these guys happened to mirror their non-pirated files on servers that tended to be used for piracy. Why they chose to do that is anyone's guess, but it's easy to solve the problem. If the bandwidth costs were actually hurting them, I'm sure they already would have found a new mirror host.

Because technology is neutral. TPB is the best place to put up a torrent, and MU is in many instances the best filehost for large files. MU's affiliate program also means that they might have gotten some extra cash, which could help a bit with their server costs.

Its still a means to a end and torrents/links are a means to an end. A end that tends to side with illicit profit.

You know, the other day I preordered Pier Solar -- it's a fangame released as a Sega Genesis cartridge. It's got an optional music CD with an improved version of the sountrack for customers who have the SegaCD add-on. The CD comes in a $25 soundtrack bundle, but is available as a free download if you want to burn it yourself.

Except all 3 mirrors are now defunct; the first one is a MegaUpload link, and the second goes to a Pirate Bay listing that no longer exists. The only option to download the thing is directly from the website, which costs them bandwidth.

There ARE people using sites like MU and TPB for legit purposes. That's not to say they're not willful infringers, but it would sure be nice if the law-abiding users didn't get taken down with them.

In a perfect world someone would create a P2P file sharing site where people would only share legit and legal files. The problem with that is that amount of overhead needed to ensure that their users weren't sharing illegal files would be so burdensome that it would probably cost more than anything that they could earn. Subscribers probably would not be willing to pay money for a subscription to the site if they weren't getting content for free that they otherwise would have to pay for.

You know, the other day I preordered Pier Solar -- it's a fangame released as a Sega Genesis cartridge. It's got an optional music CD with an improved version of the sountrack for customers who have the SegaCD add-on. The CD comes in a $25 soundtrack bundle, but is available as a free download if you want to burn it yourself.

Except all 3 mirrors are now defunct; the first one is a MegaUpload link, and the second goes to a Pirate Bay listing that no longer exists. The only option to download the thing is directly from the website, which costs them bandwidth.

There ARE people using sites like MU and TPB for legit purposes. That's not to say they're not willful infringers, but it would sure be nice if the law-abiding users didn't get taken down with them.

In a perfect world someone would create a P2P file sharing site where people would only share legit and legal files. The problem with that is that amount of overhead needed to ensure that their users weren't sharing illegal files would be so burdensome that it would probably cost more than anything that they could earn. Subscribers probably would not be willing to pay money for a subscription to the site if they weren't getting content for free that they otherwise would have to pay for.

THis is why you go after links to whole or part of whole copyrighted items that are trying to earn a profit, you allow more legitimate uses of the technology without crippling it.

The funniest thing of all is that these discussions may be completely irrelevant. Copyright infringement isn't covered by the US - New Zealand extradition treaty. They tried throwing a pile of other things at Kim as well, but those might not be covered either.

Owners of Storage rental business, payed parking lots/garages, warehouses, transportation units from shipping containers to car rentals,hotels,gyms,postal and package services, and apartments should all be held criminally liable for any illegal activies that make use of their services. State and federal officials for crimes that make use of roads as well. They all knowingly provide a service they know is possible, nay!, likely that at LEAST one person who is using their service is doing something illegal. That is how the internet is trying to be handled, so it is how the rest of all industries should be handled.

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

There are not swear words sufficient enough to damn this hypocrisy.

Why are you wasting time here posting that and not out doing heart transplants on African babies then?

Dumbass.

Sorry, I actually cared about people for a minute there. Won't happen again.

No, you don't care. You are just trolling.

And, in any event, locking up Kim Dotcom should create a certain amount of surplus food.

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

There are not swear words sufficient enough to damn this hypocrisy.

Why are you wasting time here posting that and not out doing heart transplants on African babies then?

You know, the other day I preordered Pier Solar -- it's a fangame released as a Sega Genesis cartridge. It's got an optional music CD with an improved version of the sountrack for customers who have the SegaCD add-on. The CD comes in a $25 soundtrack bundle, but is available as a free download if you want to burn it yourself.

Except all 3 mirrors are now defunct; the first one is a MegaUpload link, and the second goes to a Pirate Bay listing that no longer exists. The only option to download the thing is directly from the website, which costs them bandwidth.

There ARE people using sites like MU and TPB for legit purposes. That's not to say they're not willful infringers, but it would sure be nice if the law-abiding users didn't get taken down with them.

In a perfect world someone would create a P2P file sharing site where people would only share legit and legal files. The problem with that is that amount of overhead needed to ensure that their users weren't sharing illegal files would be so burdensome that it would probably cost more than anything that they could earn. Subscribers probably would not be willing to pay money for a subscription to the site if they weren't getting content for free that they otherwise would have to pay for.

Or more likely, in order to run it and run it well, you'd need to find a way to get SOME people to pay, and Megaupload's download incentives program is what finances its operation.

I want to separate two things: the belief that there should be a way to share large files in the Internet (which I believe) and the fact that such file sharing should always be free. The problem with the latter part of that statement is someone has to pay for the servers that host those files and the bandwidth to those servers. That money doesn't come out of thin air.

Malaria is slowly killing 2E8 people, another 1E8 are bordering on starvation every fucking day, but WAIT, SOMEBODY COPIED DVDS OVER THE INTERNET WE MUST PUT THEM INTO TEH PRISON THAT'S WAY MORE IMPORTANT.

There are not swear words sufficient enough to damn this hypocrisy.

Why are you wasting time here posting that and not out doing heart transplants on African babies then?

Dumbass.

You're suggesting that a 'dumbass' perform open heart surgery on African babies? Are you a monster?

Also I thought personal attacks weren't allowed on Ars?

Finally, since our tax money is going to pay for these kind of things what exactly is wrong with questioning why our governments waste money to support corporate interests instead of actually helping people? Not just protecting people who are rich enough already...

And, in any event, locking up Kim Dotcom should create a certain amount of surplus food.

It's trolling to question how public funds raised from taxation are spent?

In the comments to an article discussing a completely unrelated issue? Absolutely.

Quote:

Also how do you know he doesn't care? That's a pretty nasty accusation to make against someone that they don't care about the millions of people dying of horrible diseases in the world right now...

If he really cared, he wouldn't be spamming a technical discussion of the charges against MU. He's just using a cheap rhetorical device to try and support MU. IOW, he doesn't care about the poor; he cares about poor Kim Dotcom.

Owners of Storage rental business, payed parking lots/garages, warehouses, transportation units from shipping containers to car rentals,hotels,gyms,postal and package services, and apartments should all be held criminally liable for any illegal activies that make use of their services. State and federal officials for crimes that make use of roads as well. They all knowingly provide a service they know is possible, nay!, likely that at LEAST one person who is using their service is doing something illegal. That is how the internet is trying to be handled, so it is how the rest of all industries should be handled.

You did have a point in there...but then you lost it. The owner of a self-storage facility doesn't commit a crime if someone stores drugs in the unit and the owner doesn't know. Even if it was *likely* that someone was storing something illegal.

But that's not MU; MU is charged with specifically paying people who uploaded infringing material - this is what some of their e-mails listed in the indictment are about. So while an innocent self-storage owner isn't guilty of a crime if customers store drugs there, he *is* going to be guilty of a crime if he pays his customers to store drugs in the unit. (And it's just dumb if he sends them an e-mail memorializing this agreement.)

If he really cared, he wouldn't be spamming a technical discussion of the charges against MU. He's just using a cheap rhetorical device to try and support MU. IOW, he doesn't care about the poor; he cares about poor Kim Dotcom.

Or, he cares about the inappropriate use of scarce federal funds. This apparently took around two years of work, which means we spent a pretty penny just in the manhours. There are almost certainly better ways to have spent those funds, and fighting the ills described would likely be a good example of better ways to spend those funds.

If he really cared, he wouldn't be spamming a technical discussion of the charges against MU. He's just using a cheap rhetorical device to try and support MU. IOW, he doesn't care about the poor; he cares about poor Kim Dotcom.

Or, he cares about the inappropriate use of scarce federal funds. This apparently took around two years of work, which means we spent a pretty penny just in the manhours. There are almost certainly better ways to have spent those funds, and fighting the ills described would likely be a good example of better ways to spend those funds.

Thank you for placing my sentiments into a more rational context. I appreciate it.

u mad bro? Trolling is against the TOU so I'm not directly quoting you.

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Whether or not the actions of the individual were found guilty by the courts, the company service and operation itself (which I assume should be treated separately) would be hotly contested. Why? Just look around at the type of industry that sprung up over the past few years. The outcome from this case could likely be a chilling affect and may even impact small businesses and entrepreneurs quite negatively.